Karpeles Beats Embezzlement Charges in Mt Gox Ruling

Karpeles Beats Embezzlement Charges in Mt Gox Ruling

The Tokyo District Court has found Mark Karpeles, the former head of now-defunct Bitcoin exchange platform Mt. Gox, guilty of record tampering but innocent on other charges related to embezzlement and breach of trust.

Per reports in the Wall Street Journal, the court’s verdict is a massive blow to Japanese prosecutors who have maintained their stance that Karpeles was guilty of embezzlement and breach of trust at Mt. Gox.

The sentence, which was carried out on March 15, will see him serve a suspended sentence of two-and-half years in prison. He can skip jail altogether if he stays on his best behavior.

While prosecutors pushed for a 10-year prison sentence, the court rebuffed some aspects of their claims and handed down a more lenient sentence.

How Things Went Sideways for Karpeles

Karpeles was the head of Mt. Gox when the firm applied for bankruptcy protection in 2014, following a security breach, where 850,000 Bitcoin (BTC), worth about 48 billion Yen ($430 million) at the time, was stolen from the exchange’s vaults.

He was subsequently arrested in 2015, following an accusation that he embezzled 341 million Yen (about $3 million) from the accounts of customers.

Per the allegations, he was alleged to have transferred the money from the accounts of the company’s customers directly into his own, using the funds to bankroll a lavish lifestyle.

The transfers were made with the use of his personal computer, then he went a step further, covering his tracks by falsifying the company’s records.

Mt. Gox’s Poor Accounting System Might Have Saved Him

The falsification of records was a major bone of contention for the court. In its ruling, the court pointed out that by falisfying records,